Contract City

When a town’s budget fight turned deadly.

When Costa Mesa tried to lay off half of its staff, a city that wasn’t yet broke got broken.Credit Photograph by Alejandro Cartagena

Costa Mesa has no apparent center: if there’s a there here, it’s unclear where. When Tony Soprano was in a coma on “The Sopranos,” he had hallucinatory memories of being a solar-heating salesman in Costa Mesa, which is forty-five minutes to forever south of Los Angeles, depending on traffic. David Chase, the show’s creator, chose the city because it was so foreign to Soprano’s New Jersey roots: “It’s very flat and pleasant and contemporary—the kind of place where Tony couldn’t be happy for five minutes.”

The three freeways that transect this city of a hundred and seventeen thousand fling you out to scattered hubs: South Coast Plaza, America’s second-largest mall; the five-theatre Segerstrom Center for the Arts; the car dealers and skeevy motels on Harbor Boulevard; the west-side pocket of surfwear manufacturers. As with much of surrounding Orange County, the in-between spaces are a beige blur of developments and office parks bermed out with Marathon Sod and lone crape myrtles. “When I first moved here, in 1987, I was always lost,” Costa Mesa’s mayor, Gary Monahan, told me. “You’d miss your turn and never get back.”

Still, residents proudly define themselves in opposition to Orange County stereotypes, whether it’s the tidy exurban monotony of Irvine, to the east, or the reality-show-ready opulence of Newport Beach, to the southwest. Pointing to their biker gangs and their barrio, Costa Mesans describe the city as diverse, tolerant, and—though it is heavily Republican—democratic.

What served as a civic nucleus, until recently, was City Hall. The five-story glass-and-white-brick box is home to many of the municipality’s four hundred and ninety-seven employees; it’s also where you report potholes, get a dog license, pay parking tickets, and sign up for Mommy & Me yoga. But City Hall is now under fire from the budget-slashing wing of the Republican establishment, in a war of words and pink slips reminiscent of an earlier anti-union era, when the Pinkertons battered the Wobblies with fists and clubs. One local Republican official invoked a grade-school indignity to explain the uprising, telling me, “The labor unions have done a masterful job of pantsing the taxpayer.”

Among the anti-unionists were citizens who felt that, because of City Hall’s misplaced priorities, the amenities that had drawn their families to Costa Mesa were slipping away: there were unmowed ball fields, cracked sidewalks, and even—in a screenwriterly touch—bands of coyotes roaming the streets. “We can’t afford to have dog-poop bags in my neighborhood park anymore,” a resident observed. “But, meanwhile, we have eighty-five employees making over two hundred thousand dollars a year.” In a city where the median household income is sixty-two thousand dollars, the median compensation package for a city employee had risen to a hundred and thirty thousand dollars, and last year pension costs consumed fifteen million dollars of the ninety-three-million-dollar general budget.

Local budget deficits are a national problem. Cities are where people will actually feel the results of the argument over the country’s fiscal future, and American cities are running deficits of some fourteen billion dollars a year. One glaring contributor to the problem is growing pension payments. New York City’s pension funds are projected to run out in ten years; Philadelphia’s, in four. The consequences of chronic underfunding for small cities like Central Falls, Rhode Island, are dire: in July, a state-appointed receiver cajoled retired municipal employees to forgo up to half their retirement benefits, or face a worse clawback when the city declared bankruptcy (as it did a few weeks later). His inducement: “A haircut still looks a lot better than a beheading.”

Cities can’t look to their states for help: a recent study estimated that there was a $1.26-trillion funding gap in state workers’ retirement benefits, countrywide (with California responsible for an eighth of that). Seeking to fend off budgetary disaster, Republican leaders in Wisconsin recently stripped unions of many of their collective-bargaining rights; in New York, where government pension costs grew tenfold during the past decade, to fifteen billion dollars, the Democratic governor, Andrew Cuomo, wants to raise the minimum retirement age for government employees by as much as eight years.

In Costa Mesa, the budget battle was gladly taken up by a new city council, driven by Jim Righeimer, a backslapping real-estate developer whose burly physique and eagerness to scrap call to mind Friar Tuck. Righeimer won his council seat in last fall’s election by arguing that Costa Mesa was broke and broken, a Rome sacked by Vandals: the 911 operator who made a hundred and seventy-six thousand dollars, the aerial police who lounge around the hangar watching TV. Apprehending trouble, the police association spent sixty-eight thousand dollars on campaign ads attacking Righeimer, even as six other unions from nearby cities poured in additional funds. The association also obtained the domain name righeimer.com and stuffed the site with documents showing that the developer couldn’t even balance his own books. (Righeimer acknowledges that by 1989 his debts had mounted to $7.5 million, but says that he paid everyone back by liquidating his housing projects, his house, and even his Mercedes 560 SEL.) Gary Monahan—a pub owner and longtime councilman now serving, in the city’s rotating system, as the mayor—told me, “The fact that the unions went after Jim so hard, and the campaign was as dirty as it was, made it clear that we don’t only have a budget problem; we have an attitude problem.”

Righeimer found an ally in another new councilman, Steve Mensinger. Mensinger, also a developer, is a rangy, self-assured man who heads the local Pop Warner league. The two men determined to make Costa Mesa shine like a Lands’ End catalogue. They’d spend less on workers and more on infrastructure, building a homeless shelter, buying up and shutting down the fourteen motels that house parolees and pedophiles, and forbidding the muscle-car set to fix their rigs in their driveways. They’d run the city like a business, and even change the city manager’s title to C.E.O. (Costa Mesa has a traditional council-manager government, in which an elected council determines policy and an appointed city manager runs day-to-day operations.) All this, they believed, would attract young, college-educated families and make the place a booster’s delight.

In January, with the city facing a projected five-million-dollar deficit, Righeimer began working with Monahan on a secret plan to slash the budget. Referring to the unions and workers’ associations that the city negotiates with, Mensinger told me, “I don’t think the prisoners should be running the prison.” The next month, with four days’ notice, the council voted four to one to send layoff notices to two hundred and thirteen of the city’s employees, almost half the staff. The layoffs wouldn’t take effect for six months: in the meantime, the city would invite bids for such services as auto repair, street sweeping, and firefighting, then determine which of those services could be profitably outsourced and how many employees should be cut. The more the merrier, Righeimer believed. He said, “We had one manager we had to write a three-hundred-thousand-dollar check for because he grabbed some employee’s ass. We outsource that, someone else is writing that check.” If you made government go away, you’d get rid of the problems it created, and the problems it was supposed to solve would take care of themselves.

The city was quickly divided between those who deplored the unions’ menacing behavior and cushy contracts—which allow up to twelve days of sick leave a year—and those who found an unquantifiable value in knowing their friendly local paramedic. The largest employees’ union financed a poll that indicated that Costa Mesans hated the outsourcing; the conservative Costa Mesa Taxpayers Association financed one indicating the opposite. Billy Folsom, a Vandyke-bearded, steel-earring-wearing N.R.A. member who’s been a mechanic for the city for thirty years, said that he and his friends were outraged by what they saw as the council’s stealth attack on diversity, both social and economic. “What is our role here in the race to the bottom?” he wondered. “How much more do we let the middle class get slaughtered?” The fear, among unionists and many citizens, was that Righeimer’s council would destroy the city in order to save it.

Yet the Lakewood Plan—the outsourcing of nearly everything—is a time-honored California model, named after the city of Lakewood, which incorporated by contracting its services out to Los Angeles County in 1954. Eighty per cent of the state’s newly incorporating municipalities have now adopted the template, which has allowed such latecomer Orange County cities as Aliso Viejo and Laguna Niguel to instantly provide the fire and police protection, road building, and animal control that taxpaying citizens expect. Of course, subscribing to the “contract city” model means accepting that you live in a jumped-up development rather than in a real, old-fashioned town with its own libraries and meter maids and beat cops (“Hi, Officer Mooney!”). In the normal course of events, though, after a mild rumpus Costa Mesa would have followed some version of the Lakewood Plan.

Then, on March 17th, one of the employees who had received a layoff notice—a twenty-nine-year-old maintenance worker named Huy Pham—jumped off the City Hall roof.

Huy Pham was the new face of Orange County. The youngest of four brothers, Pham grew up speaking both Vietnamese and English at his mother’s house just north of Costa Mesa, where he continued to live as an adult; forty-four per cent of the households in the county now speak a language other than English.

Pham, who was a stocky five feet seven, had a warm smile but was exceedingly shy. When his supervisor, Doug Lovell, took photographs of his framing, decking, and drywall jobs, Pham would turn away, even as he kept shaping and joining. Lovell, who was very fond of Pham, said, “He could build a house from the ground up, and he always had his eyes open for things that needed fixing. I’d tell him, ‘The way you’re going, you could replace me.’ ” One co-worker said, “His hands were like gold.”

A devoted hiker, Pham had planned to ascend to the Mt. Everest base camp in August. But he’d broken two bones in his foot while rock climbing in January, and since then he’d been restlessly at home, on unpaid leave. He thought that, with his skills, he would probably be rehired by whatever contractor took over city maintenance—yet, because he was one of his family’s chief providers, the prospect of getting fired alarmed him. After being a model employee, he had had some troubles last year, including a one-day suspension for sleeping on the job. In a tape of the disciplinary hearing, last September, Pham sounds penitent as he says that he is just getting off “a medication prescribed to me by doctors,” and that, because the city is short-staffed, “I try to go to work even though sometimes I know I shouldn’t,” since he was stretched thin by the demands of work, his family business, and getting his contractor’s license. Pham’s department head urges him to focus on his job, if he wants to keep it. He tells Pham that his other commitments are “branches,” but “this is your main freeway.”

Pham’s older brother, John, told me, “He really liked working for the city, and he’d said he could see doing that his whole life.” The two brothers had planned to move to Costa Mesa, and were looking for a house to buy. But, after more than four years on the job, Pham made only $45,600, and, as one of the city’s lowest-paid employees, he was one of its most vulnerable to being laid off. (The city was making do without a finance director, and with an acting fire chief, but it wasn’t immediately seeking to trim any of its highest-paid employees. “You gotta have heads of departments,” Righeimer explained.) The mechanic Billy Folsom told me, “I think being demonized as a parasite affected Huy. The last time I talked to him, he said, ‘I just want to do my work—why am I a bad guy?’ ”

On the morning that layoff notices for Pham’s department were handed out, his mother reassured him that even if he lost his job things would turn out just fine. He wasn’t expected to go to work that day, but he drove his Ford Mustang to City Hall and—without picking up his notice—made his way onto the roof shortly after 3 P.M. A man in the parking lot next door saw a worker in a blue shirt walking near the edge of the roof, and assumed that he was doing some maintenance. Moments later, another man nearby heard what sounded like “a large amount of lumber dropping to the ground.” He whipped around and saw a crumpled body face down on the sidewalk; Pham had landed so hard that his sandals had flown into a nearby bush. He had five dollars in his pocket, and five credit cards. There was no note on his body, or anywhere else.

A brawl over the meaning of his death began within minutes. Jim Righeimer recalled, “I got a call from Tom Hatch”—the city’s newly appointed C.E.O.—“and I immediately went over.” About a hundred city workers had already gathered in the parking lot, hugging and crying. “I see groups of employees glaring at me, but we already knew the employees weren’t thrilled. There’s yellow tape up, the body is blocked by cardboard walls. I go over to the interim police chief, and I ask his public-information officer—uncomfortable question, but you have to ask it when you hear the guy is twenty-nine—‘How do we know it’s a suicide?’ Because there’s no parapet on our roof, and he hit head first. Does that sound like a guy jumping? That sounds like a guy tripping.”

Nick Berardino is the general manager of the Orange County Employees Association, an umbrella group that, through the Costa Mesa City Employees Association, represented Pham and a hundred and ninety-seven of the city’s other workers, those who aren’t cops or firefighters. Berardino, a hot-tempered man with a placatory gray mustache, was mulling over how to turn the day’s pink slips into an effective P.R. campaign when he heard the news. “I’d never had a more sinking feeling,” he said. “I was a machine gunner in the Marines during the Vietnam War, but this went beyond that. It brought home to me what’s happening all over America—the vicious effect of the actions of a group of politicians who’ve demonized working people.”

After driving to City Hall, Berardino charged at Hatch, yelling, “This is what happens when you send out massive layoff notices in this economy. You’re fucking responsible, because you’re the fucking leader.” Berardino had to be restrained by two cops. He told me, “What I saw in Hatch was an executive who was making two hundred and eighty thousand dollars a year and who didn’t stand up for his people.” Unnerved by the suicide and by the encounter with Berardino, Hatch later wept in his fifth-floor office.

Workers glared at Righeimer and Steve Mensinger as they entered the building, “as if I was to blame,” Mensinger said. When Doug Lovell, Pham’s supervisor, saw the councilmen go in, he ran at them with his fist cocked—only to be bear-hugged by a traffic engineer. “To tell you the truth, I don’t know what happened,” Lovell recalled. “The next thing I remember is my boss walking me away, saying, ‘Calm down, Doug! Calm down!’ ”

Nick Berardino heard from a worker that the mayor, Gary Monahan, was standing in front of his pub, Skosh Monahan’s, “laughing and joking in a skirt.” It was St. Patrick’s Day, the pub’s busiest day of the year, and Monahan, a slight, friendly man, was wearing a green kilt and a green bonnet as he played host. Monahan told me he’d got a call earlier with the news about Pham’s death: “I walked away thinking, Everything’s under control. I’m not a police officer or a medic—what can I do if I go down there?” When Berardino drove to the pub, he said, “Monahan was out there with his arm around two blond women, with people taking pictures. So I took some pictures, too, on my BlackBerry. He said to me, ‘Man, let me see those.’ I said, ‘Don’t worry, you’ll see them. I’m from the union.’ ”

Berardino showed the photographs to news crews at City Hall, and Monahan became an instant symbol of civic callousness, a conclusion that was helped along when Berardino funded Internet ads showing Monahan in his kilt. The council’s attempt to shape an alternate narrative—no one had been laid off yet, and there was no way of knowing Pham’s motivations—was crippled by its hapless press conference the following day. After Tom Hatch declared that Costa Mesa was going to be the nation’s most transparent government, he and the council members declined to answer questions. TV reporters savaged an ashen Monahan—“Is there no one that will speak to the people of Costa Mesa?” “You should be so ashamed of yourself, sir!”—as he and the others walked out.

Principled disagreement had hardened, overnight, into enmity. Greg Ridge, a leader of Repair Costa Mesa, one of two opposition groups that formed at a candlelight vigil for Pham the following day, told me, “I’m not saying Righeimer, Mensinger, and Monahan pushed him off the roof, but they set up the circumstances. And he jumped right in front of where they park their cars.” A story spread that Pham, who worshipped at the Holy Spirit Catholic Church, had chosen to jump at exactly 3:17 P.M., on 3/17/11, in order to point to a Bible verse, possibly John 3:17: “God sent his Son into the world not to judge the world but to save the world through him.” (The police have been able to narrow the time of death only to between three-fifteen and three-twenty.)

“How about we just go to a cave and paint his image on a wall?”Buy the print »

Jim Righeimer saw Pham’s death differently. “Nick [Berardino] was instantly using the tragedy for political gain, saying we’ve got blood on our hands, but I think it’s an accident. The police didn’t interview his family or check his phone records—they wanted a suicide, and that’s what they got.” While acknowledging that no one saw Pham jump, the police noted that there was no indication that his fall was accidental. Responding to Righeimer’s imputations, the interim police chief, Steve Staveley, said, “I’ve been a policeman since these guys were playing in their sandbox at their mommy’s house, and, with all respect to his elected position, he should educate himself before he starts shooting his mouth off. It’s morally and ethically wrong.”

When Orange County incorporated, in 1889, it was a stretch of bean fields and orange groves for developers to dream on. It soon came to showcase every variety of American fad and excess: ostrich farms; silver mines; oil wells; hot springs for “trembling nerves” and “melancholia”; Cold War defense contractors; and, more recently, the headquarters of Taco Bell, El Pollo Loco, and In-N-Out Burger. As the county’s population exploded after the Second World War, from two hundred thousand in 1950 to more than three million now, avatars of monumentalism grew along with it, including Disneyland, the South Coast Plaza mall, and the Garden Grove Community Church, the nation’s first modern megachurch. Robert Schuller, its pastor, who later built the even more gargantuan Crystal Cathedral, nearby, called his drive-in house of worship a “shopping center for God.”

For years, the county was the troll under the bridge of American conservatism. In 1968, Fortune labelled it America’s “nut county,” because of figures like Representative James Utt, who had suggested that “a large contingent of barefooted Africans” might be training in Georgia to seize the country on behalf of the United Nations. Lisa McGirr’s “Suburban Warriors: The Origins of the New American Right” notes that in the early nineteen-sixties the Costa Mesa city council went so far as to strictly regulate collections for UNICEF on Halloween, believing that they represented “an insidious effort” by the U.N. to take over America.

As early as 1963, the Orange County Register began calling for private police forces, firehouses, and roads. But the region’s libertarian thrift is harnessed to a remarkable fiscal recklessness. Steve Marx, of Marx Servicing Mercedes, in Costa Mesa, told me, “Ten years ago, I believed that eighty per cent of the people who owned a Mercedes here couldn’t afford it, because they’d never pay to maintain them. Now those same people have found a way to afford one—leasing. It’s just that after three years they’re left with nothing.”

The Crystal Cathedral recently went bankrupt; Lincoln Savings and Loan Association, in Irvine, was at the heart of the Keating Five scandal, in the nineteen-eighties; and all the top national mortgage lenders that were headquartered here during the recent housing bubble—Argent, New Century, Fremont Investment & Loan, Option One, and Ameriquest—are now defunct or under new management. The county itself declared bankruptcy in 1994, courtesy of its treasurer, Robert Citron, who had consulted a mail-order astrology service in making investments. For years, his returns were excellent, and many of the county’s municipalities borrowed money to join the investment pool, relying on his bets to pay their bills. But, when interest rates spiked, the county landed $1.64 billion in debt. Citron pleaded guilty to six felonies, and the county had to lay off more than a thousand employees. California’s premier historian, Kevin Starr, remarked, “Orange County thought it was Orange County, Inc., but it’s not. . . . This is a kind of warning shot across the bow of those who would like to slowly privatize the United States.”

For Scott Baugh, the chairman of Orange County’s Republican Party, the outsourcing plan put forward by Jim Righeimer—with whom Baugh shares an office suite—was a long-overdue attempt at fiscal sanity. In a speech last year, Baugh declared, “We’re the most irresponsible generation this country has ever known . . . selfish, narcissistic, and dependent,” and announced that he would no longer endorse any Republican who took campaign contributions from a union or voted for “outrageous” pension benefits. Of course, budgets aren’t just about income and outflow; they’re also the most tangible way to advance an agenda, and the Party’s county Web site warns that “the battle against Obama’s union bosses begins in your city.” For years, however, it was local Republican leaders like Gary Monahan who approved those generous union contracts. Will Swaim, the former publisher of the local OC Weekly, observes, “The narrative is that Orange County is conservative and therefore fiscally responsible, but the facts on the ground are that these Republicans make shitty financial decisions. Ironically, the city that’s run by Democrats—Irvine—is probably in the best financial position.”

The state’s pension problem began in 1999, when Senate Bill 400, passed during the dot-com boom with little debate, started a chain reaction of retroactive pension increases. Many policemen and firemen in California now have the right to retire at the age of fifty, with up to ninety per cent of their salaries (in many states, it’s fifty per cent). The bill lowered the retirement age of some workers by five years, and increased the portion of their highest salary that counted toward their pension by up to half a per cent a year—which immediately increased those pension obligations by more than twenty-five per cent. Retirement costs are projected to consume one-third of Los Angeles’s budget by 2015, and half of San Diego’s budget by 2025.

John Moorlach, a Republican accountant who is one of Orange County’s five elected supervisors, argues that both the 1994 bankruptcy and the current pension quagmire derived from the same wishfulness: “Citron hoped that interest rates would go down, and pension-fund managers hope the stock market goes up and up and up.” This sort of fairy dust was sprinkled nationwide. As the Wall Street Journal reported, two-thirds of the country’s largest public pension plans assume a return of eight per cent a year—when the compound growth rate of the stock market, in the past twenty years, has been about 6.5 per cent. “Neither of those areas can be controlled,” Moorlach pointed out. “But a lot of creative and entrepreneurial people live here, and they tend to believe that yesterday will always be tomorrow.”

The county supervisors, led by Moorlach, recently lost a four-year, multimillion-dollar court case in which they argued that retroactive pension increases given to their deputy sheriffs violated the state constitution. But Moorlach remains willing to try almost anything to rein pension costs in. “The other radical idea is you just fire everybody and then rehire them as new employees at new tiers,” he said, referring to contracts, now in place in Costa Mesa and many other cities, that provide lower benefits to new employees. He grinned and shrugged. “You’re going to be in court on that one, too,” he said.

One evening in April, Jim Righeimer looked warily at the two hundred people who had filled the local community center, for a forum entitled “Feet to the Fire.” He and three other panelists would be discussing the budget for the coming fiscal year; it was a last chance, potentially, for the warring factions to find common ground. “There’s Nick Berardino,” he said, looking over at his fellow-panelist, who was wearing a red tie as wide as a flounder. “He and I have never officially met.”

“Better put on your bulletproof vest, Jim!” a friend called, and Righeimer winced. His wife had wanted him to cancel, fearing for his safety. It was unclear how surly the audience would be: the Costa Mesans I spoke with seemed to want both a balanced budget and happy employees—both real change and a return to easy comity—but there was gunpowder in the air. At a recent council meeting, some fifty people had come forward to speak, and sentiment ran against the layoffs nearly three to one. Not long afterward, someone threw a brick through the window of Gary Monahan’s bar, wrapped in a note that said, “Suicide is just the beginning. We don’t want you in Costa Mesa anymore.” And, during a later community “fun run,” a high-school English teacher confronted Steve Mensinger, calling him “an enemy of the workers of this city.” Mensinger told me he’d expected resistance—“Bring it on!”—but predicted that it would dissipate if his team held the line in the red zone: “Politics is very similar to Pop Warner. People think they can bully you into making their son the quarterback, but once they realize their son’s a lineman they stop bothering you.”

The distrust of the council was triggered by problems with the numbers its members invoked to argue that the city was broke. The city had spent as much as thirty-four million dollars in reserves during the recession, but more than forty million remains. In February, a city budget officer named Bobby Young announced that pension payments would rise to twenty-five million dollars by 2015; later, he began to back away from that number. In retrospect, he told me, he might have stressed that “that alarming, Oh-my-God PowerPoint slide included the assumption that employees would stop making payments toward their plans after the current contracts expire.” Employees contribute as much as 8.5 per cent of their salaries to pension costs—percentages that were more likely to grow than to vanish in the next negotiations. But, Young said, “my concern was if you show a line that’s fundamentally flat the employees could use that to say, ‘We’re not picking up more of our costs.’ Either way, it gets political.” There was even uncertainty about the wisdom of bidding out eighteen different departments. Tom Hatch, the C.E.O., told me that he believed at least a third of the city’s departments wouldn’t be underbid, and Gary Monahan put the figure at half.

After the forum began, Wendy Leece—the only council member to vote against the proposed outsourcing—asked Righeimer, “Why does Costa Mesa have to be the petri dish for pension reform?” She added that “we are not out of money, the sky is not falling,” and that his “scorched-earth policy” would make the city unpleasant and unsafe. “If we don’t wake up and stop this,” she said, “kiss the good life in Costa Mesa goodbye.”

Righeimer countered that Costa Mesa could reduce crime by expelling its undesirables and attracting better residents, not by overpaying its cops. Irvine was famously safe, he said, because “eighty-five per cent of the people there have college degrees.” (The number is actually sixty-four per cent.)

Nick Berardino surely understood that Righeimer’s definition of desirable Costa Mesans didn’t include its employees—a hundred and ten of whom have worked for the city for at least twenty years. He leaned in almost beseechingly and said, “If we’re really going to work together, you rescind the layoff notices, and we agree today, right now, in front of everybody, we come back to the table” and collaboratively make up the city’s deficit. There was a burst of applause.

“That’s not the direction the community wants to go anymore,” Righeimer declared. He did suggest a way for employees to keep their jobs: “Bid on the contracts yourselves—start your own business.”

At a fiery council meeting the following night, the local union president, Helen Nenadal, who has worked for Costa Mesa for thirty years, suggested that entrepreneurship was the last thing on her colleagues’ minds; every employee she knew was looking for a new job. “It’s happening—your city is dismantling,” she said. Come December, she went on, “I don’t know how many people you’re going to have left.”

The city calmed down in May and June, aside from someone painting Steve Mensinger’s truck red and planting a “Repair Costa Mesa” sign on his lawn. Tom Hatch proposed to eliminate the last of the deficit by whittling the police department from a hundred and thirty-nine officers to a hundred and thirty-one, putting off replacing eight police cruisers, eliminating an animal-control officer, and performing a few bits of accounting legerdemain. He even buffed up the city’s curb appeal by adding to the sidewalk-replacement fund. The budget came up for a vote on June 21st, and, at 1 A.M. on June 22nd, after a contentious, seven-hour meeting, the council voted on the city’s first balanced budget in three years.

Yet no one seemed to feel that the problem was solved, let alone that civic healing could begin. Although the budget allowed for $1.5 million in projected savings from restructuring, including any outsourced jobs, bids from contractors had just started to trickle in—and they weren’t entirely encouraging. The good news was that one contractor proposed to operate the city jail for six hundred thousand dollars less per year. But, of the Orange County Fire Authority’s three plans for taking over the city’s firefighting, the one that most resembled current staffing levels offered uncertain savings. Depending on what kind of deal the O.C.F.A. made with its employees in the next negotiations, Costa Mesa might save a million dollars a year on firefighting by 2015—or it might lose up to $1.1 million a year.

Just before the budget passed, Steve Staveley, the interim police chief, had abruptly turned in a resignation letter that riled everyone up again. The council, he wrote, had “in essence lied as they create the appearance of crisis in order to appear as the white knight to a narrow band of political followers.” The members acted “as if they are owners of the business that is the municipal government of the City of Costa Mesa, but they are not; they are merely trustees of these public assets, both human and physical, and they fail in that role completely. They are, in my opinion, incompetent, unskilled and unethical.”

What’s more, the pension morass was even boggier than everyone had thought. Rick Santos, a senior state pension actuary, told the council that because of the recession, and the delay in “smoothing” calculations to reflect decreased returns, the city would owe $25.4 million in two years—more money, and sooner, than in Bobby Young’s inflammatory projections from February. (Young now says that he expects the city’s pension outlays, after employees have paid their share, to rise to $18.5 million in two years.) Santos told me that Costa Mesa shouldn’t feel uniquely burdened: “I compared them to their neighbors, and Costa Mesa is just like every other city in Orange County—totally average.”

Other cities in similar straits have flown the flag of parley rather than the Jolly Roger, and to better effect. Atlanta’s mayor, Kasim Reed, recently struck a deal with the city’s unions to avoid layoffs while reducing its $1.5-billion pension shortfall. The accord increased employee contributions, established sharply lower benefit tiers for new employees, and raised the retirement age by two years. The pain was distributed, and the victory shared; Reed described the process as “nasty, negative, laborious, and vitriolic”—which is to say, relatively gracious.

Good leaders make unpopular decisions because they’re necessary. But they also work to explain and build support for their initiatives, especially when those initiatives threaten a way of life. Sandy Genis, a conservative former mayor of Costa Mesa, was flabbergasted by the council’s rush to privatize: “The Founding Fathers said the reason for checks and balances was to slow things down and avoid fads and mobs. Business needs to be fast, so it can respond to fads like the Beanie Baby wave, but government is supposed to be slow and deliberative.” Yet when I asked Steve Mensinger if, in retrospect, he would have handled anything differently, he said only, “Yeah, I think the council should have looked at outsourcing two years ago”—before he and Righeimer were councilmen. “Then we wouldn’t be going through this today.”

In May, the local chapter of the O.C.E.A. filed a lawsuit against the city, and in July it secured a temporary injunction forbidding layoffs that stemmed from outsourcing to private companies. Yet Nick Berardino, perhaps sensing that the claim was a long shot, told me, “We’re concerned that the Costa Mesa model—the race to the bottom as the rich get richer—could spread.” In San Francisco, the Superior Court will shed forty per cent of its employees this fall, which means that it could take more than eighteen months to get a divorce. And in Oakland a downsized police department has stopped responding to 911 calls about robberies unless they’re still in progress—which, predictably, has led to a sharp increase in robberies. Even patrician Newport Beach, next door to Costa Mesa, was outsourcing its parking-meter program, its street sweeping, and half of its park maintenance. “We may not be taking Costa Mesa’s same path,” Dave Kiff, the city manager, said, “but because of pensions we’re all going to end up in the same place—with fewer employees.” The new goal, here and seemingly everywhere, was managed decline.

Not long after Huy Pham’s death, the city quietly removed his name and salary from the compensation report posted on its Web site. When Doug Lovell was writing up job descriptions for his department, so that the city could bid out the work, he realized that “we used to outsource all this stuff, like building new walls in people’s offices, doing their electric work—and that’s why I hired Huy, because he could do so much that he saved us money. We were paying him twenty-six dollars an hour for work that would cost forty dollars an hour to outsource. And that, more than anything, is what really pisses me off.”

While Lovell continued to argue that Pham was the kind of citizen Costa Mesa needed more of, Jim Righeimer continued to disagree. In late May, he called to urge me to request the coroner’s report on Pham’s death. “You need to see the toxicology,” he said. The following day, local papers announced that cocaine had been found in Pham’s bloodstream. Righeimer was more convinced than ever that Pham’s death was an accident: “He’s on something, he stumbles near the edge. . . .” The substance found was actually benzoylecgonine, the most common metabolite of cocaine; because cocaine metabolizes quickly, this meant that Pham likely took the drug at least two hours before his death. So when he stood atop the city’s most public building he appears to have been under the influence only of his private concerns. (In August, Righeimer learned that the pathologist who conducted the autopsy had determined, based on the distance of Pham’s body from the building, that he had jumped—a conclusion the councilman finally accepted.)

Righeimer noted that the Orange County Register carried a column that day about how Pham lived on as a martyr. The story concluded, “Some of his coworkers believe that Pham committed suicide to make a statement, and that he did it in a ceremonial fashion in keeping with his culture, taking off his shoes and neatly placing them to one side before jumping.” There were no shoes on the roof, in fact, but regardless of that detail Righeimer dismissed the possibility that there was any foreign dynamic at work in his home town. “Oh, please,” he said. “That’s just bizarre. This is not some kid off the boat—he’s an American.” ♦

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